Actuaries and accountants both play a large role in a company’s finances, but that is largely the end of their similarities. Accountants keep a business’s finances straight, while actuaries analyze the potential risks of the future. Here’s a look at what the two careers entail and the differences between an actuary and an accountant.
What is an Actuary?
Actuaries must be highly skilled in mathematics, statistics, and financial theory. They use these skills to determine what can go wrong in the future, how those risks will affect a company’s finances, and how to mitigate them. They are essential to a variety of companies and corporations: hospitals, banks, insurance companies, corporations’ employee benefit departments, and government agencies (particularly in regards to pension funds).
Being an actuary takes a great deal of dedication. The education required can be grueling, and you must pass a series of examinations to become a fellow in an actuarial professional society to find a position. Actuaries must be creative thinkers, knowledgeable in business and finances, and good at communicating. Job responsibilities might include analyzing and estimating risks based on statistics, creating new ways to minimize potential risks, and giving presentations to explain this information to company leads. A career in actuarial science can lead to exciting and lucrative positions within the field.
What is an Accountant?
Accountants come in different shapes and sizes. Being an accountant might entail keeping track of a company’s finances to ensure paperwork is accurate and bills are paid, or it might require documenting financial records and keeping statements up-to-date. This might entail creating documents so business leaders can make sense of this information, preparing or paying taxes, keeping the register balanced, or looking for and reporting any discrepancies noticed during analysis.
Accountants must be confident in their use of financial software, comfortable with mathematics, and be able to explain this information to someone else, if necessary. A key trait of a good accountant is an ability to report finances fairly and accurately.
What’s the Difference?
The most obvious difference in the responsibilities of an actuary and an accountant are that actuaries work in future “what-ifs” of finances while accountants are concerned with the current state of a company’s monetary records. Actuaries tend to work for large corporations, financial institutions, or governmental agencies. Accountants however, are found in both the largest and smallest businesses —even if it is a business owner or the office manager wearing an extra hat to keep financial records in order.
In general, both accountants and actuaries must have at least a bachelor’s degree to enter the field, but most companies prefer a master’s degree from the actuaries. While both careers have the potential for continued education, for accountants a certified public accountant certificate is expected. Both positions tend to involve a lot of time with a computer rather than people, but actuaries must be good at presenting and explaining information. Additionally, while accounting tends to be a fairly straight forward major for those skilled in the field, actuarial science takes a great deal of work and effort creatively as well.
The salaries and job growth rates of these career paths also differ wildly. According to the Bureau of Labor Statistics, actuaries have a median entry salary of about $60,000; depending on the trajectory of your career, this could be closer to $200,000 once you have a little experience. Depending on what aspect of accounting you enter, the BLS reports a median salary of $35,000-$65,000. The highest 10% of accountants make $60,000-$120,000. While the job growth rate for actuaries is much faster than average, with an 18% growth rate, accountants vary from 11% to -8% between 2014 and 2024. Make sure to consider your goals carefully when choosing between careers.
